Gaming Guru

Why Can't You Find any $2 or $5 Table Games?

You come to a casino with $200, maybe $300. You've read books and have
gained great insights from this column over the years. You know how to
play whatever game you choose. You're ready to roar.

There's only one problem. You can't find a table that will accept wagers
under $15. And you know your bankroll can't sustain bets this high.
Unless you start lucky and stay lucky. Very lucky.

Why are $2 and $5 tables relics of history? Some cynics contend that the
house edge will crush most players anyway, so high thresholds run more
grist through the mill by busting patrons quickly and making room for
fresh money. Others posit a plot to KO unwary suckers early, tempting
them to sneak over to the cash advance or credit card terminals and draw
out more funds.

The real reason is more straightforward. Unlikely as it may seem,
casinos can't cover their operating expenses on low limit tables. It's
easy to misjudge a joint's earning power by picturing the solid citizens
who lose their entire stakes, while forgetting that a few win big and a
moderately large number quit with modest gains. Casino profits are
actually driven by small statistical edges in the games. Multiply edge
times amount bet over a period of time to get gross proceeds; deduct the
cost of doing business to determine the net. The figures fall smoothly
into place. Not steadily, from hour to hour or week to week, but in the
long run.

Here's how this works for blackjack. Say a casino has a $5 table. It'll
almost always be crowded, making it look like a gold mine. But look
closer. With six players, the dealer should spread 60 rounds per hour.
Assume that some players bet $5, others more, so the average is $10.
This is $60 per round or $3,600 per hour. If everyone played good Basic
Strategy, the edge would be under 0.5 percent. Nowadays, hardly anybody
plays worse than 1 percent, so 0.75 percent is a reasonable norm. At
this level, the house expects to gross 0.75 percent of $3,600 or $27 per
hour.

Of course, gamblers want free drinks at the table. And they think $200
buy-ins entitle them to at least the all-you-can-eat buffet. Such
amenities are typically worth a third of the take, dropping the net to
$18. Dealers have to be paid, as does everyone from porters through pit
and shift bosses, all the way to the top. Then there's a share of the
utility bills, amortization of space occupied up by the game, and taxes.
If you knew how to cover all this for under $18 per hour, you wouldn't
be trying to find $5 tables; you'd be running the punting palace that
had 'em.

Most table games have a higher edge than blackjack. So a casino could
conceivably eke out a profit at $5 with offerings like Caribbean Stud,
Let It Ride, and Three-Card Poker. In these games, however, a $5 minimum
requires players to start with or be prepared to wager $15 per round.
And a $100 or $200 gambling budget is too small to absorb the normal
downswings.

Roulette is another candidate for $5 action. But it's slow, 30 or 40
decisions per hour, which suppresses a casino's gross per unit time.
Further, few players have the patience to keep betting $5 on even-money
propositions because they can't usually earn enough to be satisfied. An
alternative is to make five $1 "inside" bets, say on five or 10 numbers;
hits then pay more, but are less apt to occur and a run of misses can
steadily dissipate reserves.

Is there a solution to the dilemma? Rule variations could give casinos a
higher return multiple and make it feasible for them to offer low-limit
games. Blackjacks paying 6-to-5 or even-money instead of 3-to-2, for
example, would raise the edge against a typical player from 0.75 to over
2 or 3 percent, respectively. Would you trade higher edge for a game at
a lower limit? How about tables with no free drinks or comps? You might
accept this ignominy if you were a winner. But if you played for a few
hours at $5 and lost your $200, wouldn't you feel the casino owed you
supper? The puzzle is no less perplexing for the casino bosses than for
you. It's as the poet, Sumner A Ingmark, observed:

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